IWM vs. IJH: What’s The Difference?

The iShares Russell 2000 ETF (IWM) and the iShares Core S&P Mid-Cap ETF (IJH) are both among the Top 100 ETFs. IWM is a iShares Small Blend fund and IJH is a iShares Mid-Cap Blend fund. So, what’s the difference between IWM and IJH? And which fund is better?

The expense ratio of IWM is 0.14 percentage points higher than IJH’s (0.19% vs. 0.05%). IWM also has a higher exposure to the healthcare sector and a higher standard deviation. Overall, IWM has provided higher returns than IJH over the past ten years.

In this article, we’ll compare IWM vs. IJH. We’ll look at performance and portfolio growth, as well as at their fund composition and industry exposure. Moreover, I’ll also discuss IWM’s and IJH’s annual returns, holdings, and risk metrics and examine how these affect their overall returns.

Summary

IWM IJH
Name iShares Russell 2000 ETF iShares Core S&P Mid-Cap ETF
Category Small Blend Mid-Cap Blend
Issuer iShares iShares
AUM 66.48B 63.4B
Avg. Return 13.52% 13.50%
Div. Yield 0.86% 1.07%
Expense Ratio 0.19% 0.05%

The iShares Russell 2000 ETF (IWM) is a Small Blend fund that is issued by iShares. It currently has 66.48B total assets under management and has yielded an average annual return of 13.52% over the past 10 years. The fund has a dividend yield of 0.86% with an expense ratio of 0.19%.

The iShares Core S&P Mid-Cap ETF (IJH) is a Mid-Cap Blend fund that is issued by iShares. It currently has 63.4B total assets under management and has yielded an average annual return of 13.50% over the past 10 years. The fund has a dividend yield of 1.07% with an expense ratio of 0.05%.

IWM’s dividend yield is 0.21% lower than that of IJH (0.86% vs. 1.07%). Also, IWM yielded on average 0.02% more per year over the past decade (13.52% vs. 13.50%). The expense ratio of IWM is 0.14 percentage points higher than IJH’s (0.19% vs. 0.05%).

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Fund Composition

Industry Exposure

IWM vs. IJH - Industry Exposure

IWM IJH
Technology 14.21% 14.81%
Industrials 14.78% 18.09%
Energy 3.74% 2.5%
Communication Services 3.79% 1.57%
Utilities 2.44% 2.9%
Healthcare 20.3% 10.89%
Consumer Defensive 3.65% 4.02%
Real Estate 8.59% 10.04%
Financial Services 13.76% 14.85%
Consumer Cyclical 10.99% 14.91%
Basic Materials 3.74% 5.42%

The iShares Russell 2000 ETF (IWM) has the most exposure to the Healthcare sector at 20.3%. This is followed by Industrials and Technology at 14.78% and 14.21% respectively. Consumer Defensive (3.65%), Basic Materials (3.74%), and Energy (3.74%) only make up 11.13% of the fund’s total assets.

IWM’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Consumer Cyclical, Financial Services, and Technology stocks at 3.79%, 8.59%, 10.99%, 13.76%, and 14.21%.

The iShares Core S&P Mid-Cap ETF (IJH) has the most exposure to the Industrials sector at 18.09%. This is followed by Consumer Cyclical and Financial Services at 14.91% and 14.85% respectively. Energy (2.5%), Utilities (2.9%), and Consumer Defensive (4.02%) only make up 9.42% of the fund’s total assets.

IJH’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Healthcare, Technology, and Financial Services stocks at 5.42%, 10.04%, 10.89%, 14.81%, and 14.85%.

IWM is 9.41% more exposed to the Healthcare sector than IJH (20.3% vs 10.89%). IWM’s exposure to Industrials and Technology stocks is 3.31% lower and 0.60% lower respectively (14.78% vs. 18.09% and 14.21% vs. 14.81%). In total, Consumer Defensive, Basic Materials, and Energy also make up 0.81% less of the fund’s holdings compared to IJH (11.13% vs. 11.94%).

Holdings

IWM - Holdings

IWM Holdings Weight
AMC Entertainment Holdings Inc Class A 0.52%
Intellia Therapeutics Inc 0.33%
Crocs Inc 0.3%
BlackRock Cash Funds Treasury SL Agency 0.29%
Tenet Healthcare Corp 0.26%
Lattice Semiconductor Corp 0.26%
Tetra Tech Inc 0.25%
II-VI Inc 0.25%
EastGroup Properties Inc 0.24%
Arrowhead Pharmaceuticals Inc 0.24%

IWM’s Top Holdings are AMC Entertainment Holdings Inc Class A, Intellia Therapeutics Inc, Crocs Inc, BlackRock Cash Funds Treasury SL Agency, and Tenet Healthcare Corp at 0.52%, 0.33%, 0.3%, 0.29%, and 0.26%.

Lattice Semiconductor Corp (0.26%), Tetra Tech Inc (0.25%), and II-VI Inc (0.25%) have a slightly smaller but still significant weight. EastGroup Properties Inc and Arrowhead Pharmaceuticals Inc are also represented in the IWM’s holdings at 0.24% and 0.24%.

IJH - Holdings

IJH Holdings Weight
Bio-Techne Corp 0.8%
Molina Healthcare Inc 0.68%
Cognex Corp 0.68%
Fair Isaac Corp 0.64%
Camden Property Trust 0.62%
XPO Logistics Inc 0.6%
Masimo Corp 0.59%
SolarEdge Technologies Inc 0.57%
FactSet Research Systems Inc 0.57%
Graco Inc 0.56%

IJH’s Top Holdings are Bio-Techne Corp, Molina Healthcare Inc, Cognex Corp, Fair Isaac Corp, and Camden Property Trust at 0.8%, 0.68%, 0.68%, 0.64%, and 0.62%.

XPO Logistics Inc (0.6%), Masimo Corp (0.59%), and SolarEdge Technologies Inc (0.57%) have a slightly smaller but still significant weight. FactSet Research Systems Inc and Graco Inc are also represented in the IJH’s holdings at 0.57% and 0.56%.

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Risk Analysis

IWM IJH
Mean Return 1.12 1.13
R-squared 77.73 86.39
Std. Deviation 18.87 16.8
Alpha -5.12 -4.01
Beta 1.23 1.15
Sharpe Ratio 0.68 0.77
Treynor Ratio 9.56 10.55

The iShares Russell 2000 ETF (IWM) has a Standard Deviation of 18.87 with a Sharpe Ratio of 0.68 and a Beta of 1.23. Its R-squared is 77.73 while IWM’s Treynor Ratio is 9.56. Furthermore, the fund has a Mean Return of 1.12 and a Alpha of -5.12.

The iShares Core S&P Mid-Cap ETF (IJH) has a Beta of 1.15 with a Mean Return of 1.13 and a Treynor Ratio of 10.55. Its Sharpe Ratio is 0.77 while IJH’s Standard Deviation is 16.8. Furthermore, the fund has a Alpha of -4.01 and a R-squared of 86.39.

IWM’s Mean Return is 0.01 points lower than that of IJH and its R-squared is 8.66 points lower. With a Standard Deviation of 18.87, IWM is slightly more volatile than IJH. The Alpha and Beta of IWM are 1.11 points lower and 0.08 points higher than IJH’s Alpha and Beta.

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Performance

Annual Returns

IWM vs. IJH - Annual Returns

Year IWM IJH
2020 19.89% 13.61%
2019 25.42% 26.14%
2018 -11.02% -11.14%
2017 14.66% 16.19%
2016 21.36% 20.63%
2015 -4.33% -2.23%
2014 4.94% 9.64%
2013 38.85% 33.4%
2012 16.39% 17.76%
2011 -4.19% -1.89%
2010 26.76% 26.38%

IWM had its best year in 2013 with an annual return of 38.85%. IWM’s worst year over the past decade yielded -11.02% and occurred in 2018. In most years the iShares Russell 2000 ETF provided moderate returns such as in 2017, 2012, and 2020 where annual returns amounted to 14.66%, 16.39%, and 19.89% respectively.

The year 2013 was the strongest year for IJH, returning 33.4% on an annual basis. The poorest year for IJH in the last ten years was 2018, with a yield of -11.14%. Most years the iShares Core S&P Mid-Cap ETF has given investors modest returns, such as in 2020, 2017, and 2012, when gains were 13.61%, 16.19%, and 17.76% respectively.

Portfolio Growth

IWM vs. IJH - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWM $10,000 $36,686 13.52%
IJH $10,000 $37,266 13.50%

A $10,000 investment in IWM would have resulted in a final balance of $36,686. This is a profit of $26,686 over 11 years and amounts to a compound annual growth rate (CAGR) of 13.52%.

With a $10,000 investment in IJH, the end total would have been $37,266. This equates to a $27,266 profit over 11 years and a compound annual growth rate (CAGR) of 13.50%.

IWM’s CAGR is 0.02 percentage points higher than that of IJH and as a result, would have yielded $580 less on a $10,000 investment. Thus, IWM outperformed IJH by 0.02% annually.


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